Under the Bretton Woods System, a Country with a Balance

question 142

Multiple Choice

Under the Bretton Woods system, a country with a balance of payments deficit

• A)could get loans from the U.S.government.
• B)could devalue if deflationary policies failed to eliminate the deficit.
• C)was not allowed to devalue under any circumstance.
• D)was required to devalue its currency immediately.

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Definitions:

International Debt

The total amount of debt owed by a country to foreign creditors, which can include governments, private investors, and international banks.

Consumer Spending

The total amount of money spent by households in an economy on goods and services.

Appreciation

An increase in the value of a currency in terms of other currencies.

Euro

The official currency used by 19 of the 27 European Union countries, also known as the eurozone.